Overview

Rubicon operates a custom oracle system that publishes ETF prices to Hyperliquid every 3 seconds. This section documents how our oracle works, ensuring transparency for traders.

Why We Need a Custom Oracle

Native Hyperliquid Perps

For BTC, ETH, and other crypto assets:

• Validators publish spot oracle prices

• Price = weighted median of CEX prices

• Final price = weighted median across validators

• You can trade, but not create new markets

HIP-3 Deployed Perps (Rubicon)

For our ETF perpetuals:

• We deploy our own contracts via registerAsset2()

• We run our own oracle via setOracle()

• We are the sole price authority

• Hyperliquid provides matching engine, we provide prices

This enables perpetuals on assets Hyperliquid doesn't natively support.

Architecture Overview

┌──────────────────┐     ┌──────────────────┐     ┌──────────────────┐
│  PRICE SOURCES   │────▶│   ORACLE ENGINE  │────▶│   HYPERLIQUID    │
├──────────────────┤     ├──────────────────┤     ├──────────────────┤
│ Polygon REST     │     │ OracleSystem     │     │ ETF DEX          │
│ Yahoo Finance    │     │  • Fetch prices  │     │  • SOXX-PERP     │
│ Stale Cache      │     │  • Validate      │     │  • KODEX-PERP    │
│                  │     │  • EMA smooth    │     │                  │
│                  │     │  • Submit        │     │ Uses oracle for: │
│                  │     │                  │     │  • Mark price    │
│                  │     │ State Persist    │     │  • Funding       │
│                  │     │  • Survives      │     │  • Liquidations  │
│                  │     │    restarts      │     │                  │
└──────────────────┘     └──────────────────┘     └──────────────────┘

Key Components

1. Price Sources

Multiple data providers ensure reliability:

• Price Sources — Where we get ETF prices

• Fallback Chain — How we handle source failures

2. Oracle Engine

The core processing system:

• Runs continuous 3-second loop

• Validates prices before submission

• Applies EMA smoothing for mark prices

• Persists state for crash recovery

3. Hyperliquid Integration

Submits prices via HIP-3 protocol:

• setOracle() publishes prices

• Hyperliquid calculates final mark price

• Used for funding, liquidations, margining

Submission Format

Every 3 seconds, we submit:

{
  "dex": "ETF",
  "oraclePxs": {
    "SOXX": "225.00"
  },
  "markPxs": [{
    "SOXX": "224.95"
  }],
  "externalPerpPxs": {
    "SOXX": "225.00"
  }
}

Field	Purpose
oraclePxs	Authoritative price for liquidations/funding
markPxs	EMA-smoothed suggestion for display
externalPerpPxs	Circuit breaker reference

Design Principles

Direct ETF Prices

We fetch actual ETF prices, never constructing baskets from component stocks:

• ETF providers handle rebalancing

• No drift from actual tradeable price

• Simpler, more reliable

Graceful Degradation

When things go wrong:

1. Primary source fails → try secondary

2. Secondary fails → use cached price (60s max)

3. Cache too stale → halt updates, alert

Transparency

• Open documentation of methodology

• Alert on degraded mode

• Frozen prices clearly indicated in UI

Quick Links

• Price Sources — Data provider details

• Fallback Chain — Failure handling

• Market Hours Handling — Behavior during closure

• Reliability — Uptime and monitoring